Retention rate optimization: Why you’re not a Venus flytrap and your customers aren’t flies
The Venus flytrap only needs to ‘convert’ the fly once. You need to turn visitors into repeat customers and that’s why retention rate optimization matters. Here’s what you need to do…
Venus flytraps have very high conversion rates. They’ve evolved to be very enticing to flies and other insects but the experience a little buzzing consumer gets when it enters the flower isn’t good. In fact, it’s fatal.
Retention rates don’t matter to a Venus flytrap. It just needs to eat and there’s always new flies to gobble down.
Here’s how Arthur Dobbs, the colonial governor of North Carolina, described the Venus flytrap when he first encountered it in 1760:
The great wonder of the vegetable kingdom is a very curious unknown species of Sensitive. It is a dwarf plant. The leaves are like a narrow segment of a sphere, consisting of two parts, like the cap of a spring purse, the concave part outwards, each of which falls back with indented edges (like an iron spring fox-trap); upon anything touching the leaves, or falling between them, they instantly close like a spring trap, and confine any insect or anything that falls between them. It bears a white flower. To this surprising plant I have given the name of Fly Trap Sensitive.
The evolution of the flytrap is a lot like the process you see on high converting websites that fail to deliver high retention rates. Those sites know how to trap a visitor and turn them into a customer but the trick only works once. The customer hasn’t had a great experience and, while they converted, they’re not very likely to repeat the process in the future.
Evolve a strategy with conversion and retention
It’s understandable to focus on conversion rates. That’s one of the biggest reasons SessionCam exists — we want to help you increase your conversion rates and understand your website visitors better — but conversions aren’t the end, they’re a point in an ongoing cycle.
Adobe’s Loyal Shoppers report has some sobering statistics for you if you think that converting new customers is your golden ticket to success:
In the US, 41 percent of revenue comes from returning or repeat purchasers. In Europe, those loyal customers account for 38 percent of revenue.
That means US businesses need to acquire 5 new customers to equal 1 repeat purchaser. Their European compatriots have it even worse — 1 repeat purchaser is the equivalent of 7 new customers.
The conversion rate for repeat and returning customers is, on average, 9 times that of new visitors.
During the holiday season, it’s repeat purchasers who deliver far more revenue than those desperately desired new conversions.
Make your first impression friction free
As tedious people often tell us “you don’t get a second chance to make a first impression” but, like so many cliched phrases, it’s true.
Dealing with points of customer frustration across your website and within your conversion funnels helps your immediate conversion rates and retention.
Look at both hard struggle (business rules that can cause drop off and technical errors across your site, for example) and soft struggle (cognitive issues like confusing button placement and content problems such as badly worded calls-to-action, for example).
Error tracking and prioritization are also key to boosting your retention rate. The road to repeat purchases cannot be littered with potholes.
It’s time to change the way you dig through your website issues. Try it and you’ll find some unexpectedly welcome…medium.com
Focus your attention on the errors that are causing most drop off and ruthlessly eliminate them.
Friction is your enemy.
One huge area where you can deliver a smoother experience is not requiring a new customer to make an account before they purchase.
Giving customers the opportunity to save their details after they’ve checked out increases your chances of converting them the first time and getting them back for repeat sales.
7 steps to get started with retention rate optimization
Here are 7 steps you can start working on right now to optimize your retention rate:
1. Ask customers for feedback or a review of the product they’ve purchased
2. Tie in a promo code programme that follows up on purchases
3. Work hard on your product recommendations both on site and via follow up email
4. Cross-sell products and look for up-sell opportunities that customers will welcome
5. Offer incentives for customers to follow you on Twitter or Facebook
6. Add the option to sign up to your email newsletter into the checkout process
7. Consider referral programmes with incentives for your active customers to recommend your product to their friends and contacts.
You can’t afford to take a customer’s money then be done with them like the Venus flytrap. Retention rate optimization goes hand-in-hand with your efforts to increase your conversion rates. And, of course, the 8th step you can take to help you with that is signing up for a free trial of SessionCam.
Teams fighting over UX and UI decisions? Designs that get ever more complex as everyone in your business weighs in? You…medium.com